Preparing for the end of JobKeeper
Since the government announced the $70-billion JobKeeper program to support businesses and their employees, many businesses have relied on the scheme to stay afloat. Others have been grateful for the cash boost that made the way for smoother sailing. Phase one of Jobkeeper comes to an end on 28 September and not all businesses are eligible for the next relief package.
According to a recent survey by the Australian Institute of Company Directors on the impact of COVID-19, over 40% of the respondents reported reliance on JobKeeper payments. Nearly half of eligible SMEs indicated that the JobKeeper Scheme had provided the most relief. In WA we have had a fairly quick return to normal trading however the flow on effects and delayed negative impacts on business are beginning to show.
Given the deep reliance on JobKeeper and the changes coming in September, now is the time to think about how this will impact your business. If you’re still eligible for JobKeeper at the end of September, the amount you receive for each employee will be reduced. If you are no longer eligible, you will not be able to receive this wage subsidy support at all. Jobkeeper has been a great boost to keep businesses going but with that extra financial support suddenly gone, is your cashflow in order and do you have the funds for a return to higher payroll costs?
The end of JobKeeper could create some concerns. You may be spending more than usual as jobkeeper and the cashflow boost have provided a false sense of wealth and security. So what exactly can you do to prepare the end of the JobKeeper program?
Conduct Scenario Planning
Planning makes a huge difference. So before we get to the end of the JobKeeper program for you, make sure that you have explored various scenarios for the future and plan for these accordingly.
Your scenario planning should include thinking about the worst and best possible scenarios and preparing for it. Now is also the time to revisit your business model and know which levers can you pull in the event that the government wage subsidy scheme ends earlier than expected. Chat to us. We can help map out a plan together.
Review Your Expenses and Financing Arrangements
Run your business as lean as possible and cut down on unnecessary expenses. Save as much cash as you can while you still have support from the JobKeeper program. By keeping a bit of a war chest, you will be in a stronger financial position when it ends.
If business is picking up, you might be in a good position to secure additional credit. You can also look into refinancing your existing obligations.
Keep in mind that insufficient cashflow and capital can easily throw your business off track– so secure your access to the finance you need to carry on and boldly face the uncertain months ahead. Ask for advice before taking on debt. This advice needs to be appropriate to your financial position and business circumstances.
Evaluate Your Business Model
Many businesses have developed creative ways to pivot during the pandemic. Restaurants have focused on takeaways, fitness centres have launched online sessions, and others have created totally new products or services.
What can you do to re-imagine your existing business model and understand new industry norms and market trends? Don’t just wait for your peers to do something and follow suit. Those who strategise and act first tend to find their way to the front in their industry compared to reactive players.
In today’s business landscape, adaptability and flexibility are the key to surviving and thriving. The unprecedented global crisis has put us in a tricky situation, but being flexible in the way you do business can help you roll with the waves.
From remote work arrangements to the way you design your payment models for your customers, there are countless ways to adopt these characteristics that will help you scale back quickly even as the government support ends.
You Don’t Have to Do it Alone…
Possible changes such as the early end of the JobKeeper program could have a massive impact on your strategy and direction. We understand that these events can be confusing and frustrating, but you don’t have to face these business challenges alone.
If you need professional guidance at this time, please feel free to get in touch with us. We’ll help you strengthen your position now and give you a better chance of thriving in the future.